Political, not economic
ERNEST F. HOLLINGS, former U. S. senator
2014 -- Globalization is nothing more than a trade war with production
looking for a country cheaper to produce. David Ricardo's theory of comparative
advantage in globalization is Japan's and China's closed market and predatory
practices. With closed markets and predatory practices setting the competition,
countries must move to protect and build their economies.
States was founded in a trade war (Boston Tea Party) and the Founding
Fathers showed us how to protect and build the economy by enacting the
Tariff Act of 1787 - two years before The Constitution and four years
before Madison's First Amendment Rights.
The Princeton economist Alan Blinder estimated in December 2006 that the
U.S. would offshore in the next ten years 30-40 million jobs. Our trouble
is we are still averaging the offshoring of 3-4 million jobs and payrolls
each year. And we wonder why the economy hasn't jumped back. The economists
blame the Great Recession that has been over for five years. In the Washington
Post (10/5/14) the economist Robert J. Samuelson writes the United States
seem trapped between high debts and deficit demand and
is no consensus on how to proceed." He goes on to state: "we've
lost control of the economy between those who advocate 'stimulus' to strengthen
demand and those who fear more debt." The problem is not economic
Every Governor works to attract industry and develop their state's economy.
Our trouble is that President Obama fails to enforce our trade laws to
protect the economy and Congress fails to build the economy by making
it profitable for Corporate America to produce in America, limiting the
offshoring. Wall Street, the big banks and Corporate America want to keep
the offshore profits flowing so they contribute to President Obama and
Congress to do nothing about countries devaluing their currencies; for
the President to do nothing about enforcing our trade laws against closed
markets and predatory practices; for Congress to do nothing about passing
a competitive tax for business; to do nothing about our balance in the
deficit of trade and living on imports.
and Congress do nothing. If President Obama would enforce the Defense
Production Act of 1950 like President Kennedy enforced in 1961, we wouldn't
be begging Russia for helicopters or importing uniforms for our G.I.'s.
If President Obama would enforce our trade laws against the deficit in
the balance of trade like President Nixon in 1971, it would create millions
of jobs. If President Obama would protect vital production as President
Reagan did in 1984 when he protected steel, motor vehicles, computers
and machine tools, it would create millions of jobs. If Congress would
replace the devastating 35 percent Corporate Tax with a 7 percent value
added tax that 160 countries use to compete in globalization, it would
close all loopholes giving instant tax reform. This would immediately
release $2 trillion in offshore profits for Corporate America to repatriate
tax free, create millions of jobs and jumpstart the economy. This VAT
tax cut also produces billions for Congress to balance the budget in two
years rather than ten.
South Carolina's unemployment rate has jumped to 6.4 percent because we've
lost the textile industry. We have the skills to make "the ultimate
driving machine" for BMW and Boeing's Globemaster. That's because
BMW manufactures the engines and key parts in Germany and uses Germany's
19 percent VAT to assemble the parts in Greer, SC. Toyota is doing the
same thing in Alabama, Nissan in Mississippi and Volkswagen in Tennessee.
Japan put GM and Detroit into bankruptcy as it made Toyota number one.
GM announced that it is going for the China market; Ford is buying parts
from China and Chrysler is owned by the Italians. The automobile, electronics,
computer and machine tool industries are gone and we wonder why California
has such a high unemployment rate (7.4 percent). Corporate America continues
to offshore our research, innovation, technology, production, jobs and
payrolls - our economy. The economists engage in the ying and yang of
stimulus to strengthen demand and fear of more debt.
for all our problem is political - the President and Congress - not economic.
Hollings of South Carolina served 38 years in the United States Senate,
and for many years was Chairman of the Commerce, Space, Science &
Transportation Committee. He is the author of Making
Government Work (University of South Carolina Press, 2008).
Ernest F. Hollings. All rights reserved. Contact
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Ernest F. Hollings served
the public for 56 years -- 38 years in the United States Senate and as South
Carolina's governor, lieutenant governor and a member of the S.C. House of
Today, Hollings continues
to be influential in public affairs and offers this website as a compendium
of current and past positions on public issues. Learn
more about Fritz Hollings.
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here to learn more about Hollings' impressive and distinguished record
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